Law Commons^™

Bridgefunding Is Crowdfunding For Startups Across The Private Equity Gap, Seth C. Oranburg

Seth C Oranburg

Title III of the JOBS Act of 2012, which attempts to encourage entrepreneurship by allowing startups and small business to sell stock to the general public over the Internet through “crowdfunding,” is completely backwards. Its ceiling should be a floor—the $1 million limit should be inverted. By capping startups at raising $1 million from crowdfunding, the JOBS Act does not address the private equity gap, a fundamental problem in startup markets, and exposes unsophisticated investors to risk and fraud. This Article presents a regulatory framework premised on “bridgefunding,” an approach that this article develops to protect new investors by encouraging …

The Case For The Regulation Of Bitcoin Mining As A Security, Benjamin W. Akins, Jason M. Gordon, Jennifer L. Chapman

Benjamin W. Akins

Bitcoin is rapidly increasing in use throughout the world. Instrumental to the Bitcoin system, the process for introducing new bitcoin into the system is known as “mining.” Mining involves the use of powerful computer systems and complex, computational algorithms to verify or validate prior bitcoin transactions. The reward for successfully undertaking this process is the creation and award of new bitcoin to the miner. Bitcoin mining has become a tedious and difficult process. The race to verify transactions, and thereby earn bitcoin, necessitates more sophisticated processes for verification and greater computational power.

Many bitcoin miners band together in groups called …

The Bankruptcy Of The Securities Market Paradigm, Stephen P. Wink

Stephen P Wink

The current paradigm of securities market regulation in the United States rests on the Efficient Market Hypothesis, a theory that has been largely discredited by modern economics and behavioral finance. The Efficient Market Hypothesis assumes that the price of securities in the market accurately incorporates and reflects all available material information. Building on this notion, regulators have assumed that better information leads to healthier markets—and therefore regulation that enhances disclosure and transparency leads to healthier markets. Over time, this reasoning has elevated these tools, disclosure and transparency, to ends in themselves, despite the flaws in the Efficient Market Hypothesis. Although …

The Mess At Morgan: Risk, Incentives And Shareholder Empowerment, Jill E. Fisch

All Faculty Scholarship

The financial crisis of 2008 focused increasing attention on corporate America and, in particular, the risk-taking behavior of large financial institutions. A growing appreciation of the “public” nature of the corporation resulted in a substantial number of high profile enforcement actions. In addition, demands for greater accountability led policymakers to attempt to harness the corporation’s internal decision-making structure, in the name of improved corporate governance, to further the interest of non-shareholder stakeholders. Dodd-Frank’s advisory vote on executive compensation is an example.

This essay argues that the effort to employ shareholders as agents of public values and, thereby, to inculcate corporate …

Through The Looking Glass To A Shared Reflection: The Evolving Relationship Between Administrative Law And Financial Regulation, Gillian E. Metzger

Faculty Scholarship

Administrative law and financial regulation have an uneasy relationship today. It was not always so. Indeed, the two were closely intertwined at the nation's birth. The Treasury Department was a major hub of early federal administration, with Alexander Hamilton crafting the first iterations of federal administrative law in his oversight of revenue generation and customs collection. One hundred and fifty years later, administrative law and financial regulation were conjoined in the New Deal's creation of the modern administrative state. This time it was James Landis, Chair of the newly formed Securities and Exchange Commission (SEC) and author of the leading …